Finding A Tax Adviser

Why You (Might) Need One

“I’m afraid I can’t answer that. You need to speak to a tax adviser.”

That is a common answer to questions asked in the blog comments and forums here, and elsewhere.

There are a number of reasons why you get this answer. The most common reason is that answering is simply too risky for the person asking and or the person answering. Worst case for the person asking, they do something wrong and it ends up costing them dearly. Worst case for the person answering, it is seen as giving qualified financial advice and they are liable for anything that goes wrong. Now, most posters are anonymous and there is no legal risk to them (only moral and ethical) but it is nonetheless a concern.

Another reason for the deferral is that nuances are very, very important. Most questions are vague; inherently so, because this is a sector where privacy and confidentiality are highly desired. No one wants to share their full personal and financial details on a publicly accessible forum.

However, without knowing all those details, any advice given is bad advice. Here is a non-exhaustive list of things that can make a difference for taxation in the most commonly discussed scenarios (personal wealth and corporate taxation):

Going through all that is on the asker’s side very intrusive and on the answerer’s side very time consuming to go through. Especially for the person answering, it would take hours and days to perform a thorough review and only someone with years of training and expertise can provide a qualified answer. That skill set and time cost money, hence the need for a tax adviser of some kind.

Finding an (Offshore) Tax Adviser

First of all, you need to figure out what it is you actually need.

As tempting as it might be to scour the internet for tax adviser based in the British Virgin Islands to get some good advice on your tax situation, the responsible thing to do for most people is going to be local tax advisory.

That lawyer or certified accountant you found in BVI might know the inner workings of BVI tax law like the back of his or her hand, but they are less likely to know enough about yours to give sound advice.

If you have a good relation with your home bank (particularly if you have a named, dedicated contact), they can often refer you to tax advisers. Otherwise, turn to friends and family or simply start contacting advisers, ask some initial questions, and get a feeling for what they can offer you.

It is normal to be able to ask a few basic questions without paying. Initial consultation is also often free. But just like you can’t expect someone to fix your car for free, nor can you expect someone to set up your personal finances for free.

A tax adviser in your home jurisdiction probably cannot help you with the level of detail you need. In most cases, they cannot or simply aren’t suitable for incorporating offshore, setting up a trust, et cetera. These advisers are usually just dealing with domestic law.

But aside from picking a licensed adviser, how do you pick a good adviser?

This is tricky. If, as per above, you have a strong relationship with someone at your bank and if it is an international bank (possibly with branches in tax havens), they can again refer you to advisers in offshore jurisdictions. Not all banks will do this and some may even treat you as suspicious for just asking so approach the subject with care.

The financial services industry loves patting itself on the back. It can get a very self-congratulatory but it can serve as one of many pieces of information in the hunt for a tax adviser. Look into awards and other accomplishments awarded to service providers or individuals. These are often handed out by the financial services regulator and industry organizations.

It is also perfectly normal to ask to see credentials from an adviser.

But at the end of the day, short of getting a personal referral from someone you trust, picking an adviser is very difficult.

Big Names

There are a couple of big names (big firms) that dominate the sector. These aren’t necessarily always the best choice but one thing they typically do better than smaller operators is having multi-jurisdictional knowledge.

These include the Big Four accounting firms Deloitte, PwC, KPMG, and EY. Dealing with them can be a blessing and a curse. On the one hand, they have tremendous amounts of skill. On the other hand, they cost a lot because their typical clients are large corporations or high-networth individuals.

Other names worth mentioning (jurisdiction in bracket is their home jurisdiction):

As always, none of this is an endorsement or recommendation of any kind.

Conclusion

If you want to be very thorough, two sets of competence are required: one for your current jurisdiction and one for whatever other jurisdiction you have in mind (or multiple).

A multi-national adviser usually costs more, especially ones present in jurisdictions that aren’t tax havens, but can be very convenient in that you have a single point of contact. A more frugal approach is to split the two.

In the end, though, paying a few thousand for good tax advice generally costs a lot less than the penalties, fines, reputational damage, and other potential repercussions of being convicted of tax evasion, money laundering, or other financial crime.

Addendum

Frequent forum contributor Michael Rosmer added the following on the forum:

I’ve often considered and struggled to find ways for people who don’t understand nuances of tax to determine fact from fiction amid all the different messages out there. Some suggestions for anyone trying to locate a high quality tax advisor:

– cross check – this is definitely an added expense and so a lot of people are very unwilling to go through it but it’s often worthwhile to have multiple sources vet a particular piece of information. Two words of caution here. First, take the literal content from one advisor to the other to have them vet it VA trying to explain what the one advisor said if you’re not well versed in the details you’re very likely to lose something in translation and get an inaccurate assessment. I’ve on some occasions written up specific questions for people to take to Deloitte or other major firms to help guide with this process to ensure the right information gets communicated. Second, unfortunately tax advisors frequently seem to like to bash each other’s solutions one person will favour a trust another will favour a private interest foundation one will prefer Belize another Anguilla. This is fair they are trying to win your business but learn to separate out what’s illegal from what’s personal preference.

– deal with the right people at the big firms – Deloitte, EY, etc do have some very skilled and knowledgeable tax people but just because you talk to someone from one of these firms doesn’t mean they know a thing about international tax. Chances are the local expert you’re dealing with for general business isn’t the right person to talk to about international make sure you get a referral to their international planning department and be aware usually the way these firms are organized particular advisors specialize in particular jurisdictions and client needs so use them to vet that particular information and don’t necessarily rely on them for other information. I know some advisors who are high level tax attorneys who are fantastic for the area they cover but I’m scared when I see them advising on other jurisdictions very few have a broad understanding of international tax it’s usually quite targeted the details they’ll know are critical but get the other details fact checked by a relevant expert

– get them to cite laws and case law – you’ll have cases of uncertainty and conflict sometimes it is just that… Uncertain for example Malaysian source income isn’t defined in Malaysian tax law, some court challenges have established precedents but they don’t answer everything. The best you can usually do is to have this information cited, which will help to inform the answers provided by other experts when cross checking as well

– be wary of anyone who takes a nonchalant attitude to your tax situation if they aren’t willing to dig in deep gather a lot of information and do an extensive review there’s a good chance they’ll overlook some important detail, which could end up costing you significantly.

As for referrals sadly from what I’ve seen they don’t constitute a reliable source of credibility because often people have non-compliant structures that simply haven’t been challenged and this creates a false positive for the work of the given advisor. I’ve seen a lot of high level people give referrals where the person referred simply isn’t a true expert. It doesn’t always go this way the referral might be good but it’s simply very difficult to know.